On Tax Cuts, Americans Believe Results More Than Spin

On January 11, less than three weeks after President Donald J. Trump signed the most sweeping tax overhaul in American history, House Minority Leader Nancy Pelosi (D-CA) stuck to the Democrats’ party line. “The crumbs that they are giving to workers to kind of put the schmooze on is so pathetic,” Rep. Pelosi said.

She again referred to the benefits from business tax reform—more than 2 million U.S. workers have gotten a bonus or pay raise as a direct result of tax cuts—in terms of crumbs two weeks later at a town hall meeting in Florida. And as for what investments American companies would make as a result of lower business taxes? “I think it’s insignificant,” Rep. Pelosi said last month.

Those comments haven’t aged well: It took less than two months for the results from tax reform to drown out the political spin.

According to a new New York Times poll conducted by SurveyMonkey in early February, a majority of Americans now approve of the tax law signed by President Trump in December. There is little mystery as to why. As of February 21, no fewer than 400 companies have announced worker bonuses, raises, or 401(k) boosts as a result of tax cuts, according to the nonprofit Americans for Tax Reform.

A few examples: Walmart raised its minimum wage to $11 an hour and issued bonuses of up to $1,000. Fiat Chrysler issued $2,000 bonuses, and Southwest Airlines donated $5 million to charity on top of $1,000 bonuses for its workers.

Note that none of this happened because of mandates from Washington. The real power of tax reform is that it lets Americans choose what is most important for their businesses—or their families—to get ahead. For some companies, that means bonuses. For others, such as H&K Equipment in Pennsylvania, it means millions of dollars in capital investment to grow a business.

What does that all add up to? The Council of Economic Advisers estimates the impact of tax reform could be more than $4,000 annually for the average American family—and that only accounts for reforms on the business tax side.

This month’s New York Times poll is no outlier. Other surveys indicate that tax cuts are driving optimism throughout the economy. The Small Business Confidence Index, produced by CNBC and SurveyMonkey, hit a new high this month in its first survey since President Trump signed the Tax Cuts and Jobs Act in December.

Democrats are taking notice. “Pelosi takes to the road to tamp down growing enthusiasm for Trump tax cuts,” the San Francisco Chronicle reported this week. To their credit, a few top Democrats have broken rank. “I would not describe it as crumbs,” Democratic National Committee Vice Chairman Rep. Keith Ellison (D-MN) told Business Insider last week regarding Rep. Pelosi’s comments.